Shell Game: DNA edition
Yesterday, GeneDx, a genetic testing company that specializes in rare and pediatric disease, reported that its testing volume grew 34 percent year over year. More families got answers than the year before. Also their stock dropped 40 percent, so it made the news.
That’s how I found it. I have been spending time mapping the hereditary cancer and genomics ecosystem, for reasons that are personal as well as professional. The reason the stock dropped is almost beside the point. The reason testing volume is growing is not.
The company does whole genome and exome sequencing. The short version: exome sequencing reads the parts of your DNA where most known disease-causing variants live, about 1 percent of the total genome. Whole genome sequencing reads everything. It catches things exome misses. Both tests are trying to answer the same question. Does something in this person’s DNA explain what is happening to them?
What matters for context is what GeneDx specializes in. This is not a general testing lab running panels for adults curious about their cardiovascular health. It focuses specifically on rare diseases and pediatrics. The families it serves have often been on a diagnostic odyssey for years. On average it takes nearly five years from symptom onset to diagnosis for a rare disease patient, and for many conditions significantly longer. Some arrive through a neonatal intensive care unit, where a child is critically ill and a genetic result is needed in days, not after a two-week prior authorization review. In those circumstances, the doctor orders the test, the lab runs the test. It does not wait to find out if the insurer will pay. It absorbs the financial risk of what comes next. That clinical reality is the context for the earnings report.
What dragged the stock down was something different. A software acquisition they made did not work out and they took a significant writedown on it. They also cut their full-year revenue guidance. Wall Street punishes guidance cuts.
What is underneath them is worth understanding, because it is not a GeneDx story. It is a systems story. The healthcare infrastructure built to pay for medicine was not designed for this moment, and the gap between what genomic science can do and what the payment system will support is large enough to swallow companies whole. The people who build what comes next will not be unknown for long.
Whole genome sequencing gets reimbursed at roughly half the rate of exome sequencing. A meaningful portion of whole genome claims come back as what the industry calls zero-pays. The insurer receives the bill and sends back nothing. Not a reduced amount. Zero. And in most cases GeneDx cannot then turn around and bill the family, especially for Medicaid patients, who are legally protected from that kind of billing. So GeneDx absorbs the cost. The test happened, the family got results, only nobody got paid.
The reason insurers deny these tests is rarely that they looked at the patient and decided the test was unnecessary. It is that the insurer has not yet written a coverage policy for whole genome sequencing, or classifies it as experimental, or the documentation requirements were not met in exactly the right format. The clinical evidence does not automatically update a coverage policy. Someone has to make that case, study by study, insurer by insurer, state by state.
GeneDx has been doing exactly that. In 2015 there was one state Medicaid program in the country that covered exome sequencing. On last night’s earnings call the CEO said there are now 38. They just expanded Medicaid coverage in Texas, Maine, and Arkansas, giving roughly 4.9 million low-income patients access to exome testing. They cited a published study showing their testing saves up to $80,000 in the first year per child with a neurodevelopmental disorder. That progress will be invisible tomorrow in the coverage of a stock that fell 40 percent.
The largest company that tried to do this at scale, Invitae, filed for bankruptcy in 2024. The same wall. Testing volume growing, reimbursement lagging, losses mounting. 23andMe, which took a different path entirely, selling direct-to-consumer genetics to 15 million customers, filed for bankruptcy in March 2025. Different business model, different reasons. But the result was the same: a genetics company went under, and 15 million people’s DNA data became a line item in a bankruptcy proceeding. This is not a GeneDx problem. It is a structural one.
A 2025 study out of Geisinger Health System sequenced 175,500 patients and found actionable genetic findings in 3.4 percent of them. Nearly 88 percent had no idea before the sequencing, no prior diagnosis, no referral.
I found out about my own BRCA1 mutation because my father submitted a saliva sample to a consumer genetics company to trace our family ancestry. He had opted out of the health screening portion of the test. A finding came back anyway. That is how it reached me. Not through the clinical system. The company that sent him that report, 23andMe, filed for bankruptcy in March 2025.
While all of this plays out in the US, there is a different version of the same story running elsewhere. China has a stated goal of 100 million genomes by 2030 as part of a national precision medicine program. Certain provinces have been offering free prenatal genetic testing since 2019. BGI, the Chinese genomics company, has driven sequencing costs to under $100 per genome and operates across more than 100 countries. The UK committed £650 million to sequence every newborn. These countries did not solve the reimbursement problem. They removed it. Genomic medicine became infrastructure, funded the way a government funds a highway. The test does not need to fight for a coverage policy when the state has already decided the test gets done.
The United States is not falling behind on data collection. The data is flowing. It flows through hospital biobanks, research programs, the genomic tests that do get approved, and the normal mechanics of bankruptcy proceedings, where patient data becomes a balance sheet asset like any other. The US genomic dataset is enormous. What it is not is intentional. There is no national program, no coordinated infrastructure, no design for who the data serves or what flows back to the people who generated it. That is not a conspiracy. It is what happens when something this significant grows without a plan. What fills the vacuum is a longevity industry whose results, for now, are most visible through the social media feeds of the people who can afford to participate in it. The science coming out of that ecosystem is real. The question of who gets to act on it is still being answered, one coverage decision at a time.
There is something in all of this that rhymes with Henrietta Lacks. In case you do not know her story: she was a Black woman from Baltimore who died of cervical cancer in 1951 at the age of 31. Doctors at Johns Hopkins took a sample of her tumor cells without her knowledge or consent. Those cells, now called HeLa cells, became the first human cell line that could be grown indefinitely in a lab. They were used to develop the polio vaccine. They have been central to cancer research, HIV research, and countless other breakthroughs. They have generated billions in revenue. Her family found out decades after her death. They received nothing. For years they could not afford health insurance.
The consent structures in genomics are more formalized now. But someone is still benefiting from this data. And it is most often not the person it came from. Insurance companies deny coverage for genomic tests. Patients still get sequenced through hospital systems, research programs, biobanks they enrolled in without fully understanding the downstream use. That data flows into databases that pharmaceutical companies license. Drug pipelines get built on it. The people funding that research are also the people first in line for whatever it produces.
Have been working on something larger about what this gap looks like at scale, what it costs, and what it would take to close it. Will share more when it is ready.
For now the number that stays with me is 38 states. Zero to 38 in a decade, one coverage decision at a time. That is real progress, it is also not enough.